The home price growth in the U.S. is starting to decelerate.
Standard Poor s said on Tuesday that the S&P CoreLogic Case-Shiller national home price index posted a 19.5% annual gain in September, down from 19.8% in August. The 20 City Composite posted a 19.1% annual gain, down from 19.6% a month earlier. The 20 city results came in lower than analysts expectations of a 19.3% annual gain, according to Bloomberg consensus estimates.
If I had to choose one word to describe September 2021's housing price data, the word would be deceleration, according to Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. The pace of price increases decreased slightly in September, though housing prices showed signs of strength. Phoenix rose to the top of the 20 City Composite, posting a 33.1% annual gain, followed by two cities in Florida -- Tampa and Miami. Tampa posted a 27.7% year-over-year gain and Miami a 25.2% gain.
There was a lot of price growth at the city level. All 20 cities saw price increases in September and all 20 cities are at their all-time highs, said Lazzara. September s price increase ranked in the top quintile of historical experience for all 20 cities and in the top decile for 17 of them. In 14 of 20 cities, prices were decelerated — i.e. In September, the growth increased by less than in August. Price gains showed signs of slowing down in August when the index started to level off.
Home prices have a net gain of 20% over the last 20 years. The slowing of the monthly price acceleration while home purchase activity remains strong suggests that the market is moving toward a healthier balance between buyers and sellers, said CoreLogic Deputy Chief Economist Selma Hepp, prior to the results. We are likely to see a continued slowing of monthly and annual home price gains in the coming months, while total home purchases will surpass last year s purchases. According to recent data from Realtor.com, the rate of price increases will likely continue to slow down. The data from Realtor.com shows that 17 out of the top 50 largest cities have experienced listing price declines in October compared to last year, according to George Ratiu, Realtor.com's manager of economic research.
Ratiu believes that the tight inventory that has been pushing prices up is due to more homeowners preparing to list their homes for sale in the next six months.
As we approach the end of a tumultuous 2021, real estate markets struggle with inventory, homes are selling quickly and prices continue to rise. The market has cooled since the beginning of the year when dozens of competing bids, contingency waivers and price escalation clauses made home shopping a struggle, especially for first-time buyers. Prior to Case-Shiller results, Ratiu said that inflation and rising mortgage rates are squeezing many household budgets. The landscape looks more promising for buyers as we head into 2022.